Russian Sanctions Could See Gold Prices ‘Explode’

Gold climbed $9.80 or 0.76% on Friday to $1,302.70/oz. Silver rose $0.04 or 0.2% to $19.71/oz. Gold and silver finished up for the week - up 0.60% and 0.41% respectively.

Gold eked out small gains in European trading, as growing tensions in Ukraine are contributing to higher prices. On Thursday prices dropped to $1,268.40 per ounce – the lowest since early February, before rallying due to tensions over Ukraine. In the last 3 sessions, gold bullion has rallied nearly 2%, as the crisis in Eastern Europe bolsters safe haven demand.

Gold in U.S. Dollars, 2 Years - (Thomson Reuters)

Today, geopolitical tensions have deepened with President Obama saying that the United States will impose additional sanctions on Russia targeting individuals and companies.

The move is expected to be followed by separate sanctions from the European Union. Washington said at the weekend the new sanctions would target individuals and companies close to Russian President Vladimir Putin, as well as new restrictions on high-tech exports to Russia's defence industry.

The geopolitical risks may overshadow a number of important reports on the U.S. economy this week.

The conflict reached a new level over the weekend, when a group of international observers from the Vienna-based Organization for the Security and Cooperation in Europe (OSCE) were abducted by pro-Russian groups. The separatists later released one of the captives due to a medical condition requiring treatment, but also said they had no intention of freeing the others. Negotiations for the release of the observers are underway, Russia saying it will help as much as possible with the situation.

Western diplomats will hold high level talks today, with the goal of agreeing further and tougher sanctions against Moscow. The BBC reported that, according to sources familiar with developments, this round of asset freezes and travel bans may target individuals at the top of Russia’s energy industry. There is even speculation that Putin himself and his considerable net worth may be targeted.

Russia will likely react to these sanctions and retaliate. This could come in the form of financial, economic or currency warfare.

One unappreciated risk is that state sanctioned Russian hackers may target U.S. exchanges and financial infrastructure. Bloomberg reports that “U.S. officials and security specialists are warning that Russian hackers may respond to new sanctions by attacking the computer networks of U.S. banks and other companies.”

Cybersecurity specialists consider Russian hackers among the world’s best at infiltrating networks and say evidence exists that they already have inserted malicious software on computers in the U.S.

There are concerns that small numbers of computer experts could have the ability “to cripple the U.S. economy in a few days.”

Veteran gold analyst, George Gero, who is the precious metals analyst at RBC is not a man for hyperbole or overstatement. Indeed, he has been quite bearish on gold in recent years. However, he believes that Ukraine and the deepening crisis, could have a “massively bullish impact on gold prices.”

"One of the largest suppliers of gold, and of course platinum, is Russia and if they're going to be involved in sanctions, and more problems with Ukraine, and deliveries are curtailed—and there is already a problem in South Africa between the miners of platinum, palladium and the mining companies. All of that could somehow explode on the upside and curtail deliveries, meaning higher prices."

Russia is the fourth-largest producer of gold, outputting 7% of the world's total supply according to the British Geological Survey. Were Russia to retaliate by banning the exports of all precious metals and by selling some of their large foreign exchange reserves and diversifying into gold, silver, platinum and palladium, it would likely lead to migh higher prices for all precious metals.

There is also the strong possibility of increased safe haven demand. This is likely to materialise should economic or even military conflict materialise.

HSBC point out that geopolitical incidents and a short term increase in geopolitical tensions tend to see gold prices rise, prior to the fleeting impact abating and prices falling again.

However, the risk of conflict between Russia and the U.S. and EU is more than a short term risk. It is one of the greatest geopolitical challenges since the end of the Cold War. Therefore, it is likely to have a more material impact on gold prices.

The concept of MAD or mutually assured destruction was what prevented war between the superpowers during the Cold War. Today, there appears to be a lack of awareness regarding the risk of mutually assured economic destruction.

New research shows the importance of owning gold bullion in a pension. The research looks at the important role that gold bullion can play as a diversification in pension portfolios >>> Guide To Gold In UK Pensions

So Comex control the (paper) price of gold? Now that can only happen whilst they have enough physical gold to satisfy delivery requests. Now just remind me, how many days of physical have they got left? Hmmm?

yup just start asking for payments in gold for gas and oil and game over. only has to be 10% of the bill and u will see gold take off. will they do it i dont know but i dont see why not. if u are going to give the finger to the dollar then go ahead and do it. america is certainly giving u the finer thats for sure.

gann1212 yup just start asking for payments in gold for gas and oil and game over. only has to be 10% of the bill and u will see gold take off. will they do it i dont know but i dont see why not. if u are going to give the finger to the dollar then go ahead and do it. america is certainly giving u the finer thats for sure.

All Putin needs to do is to stop Russian Companies from accepting Dollar or Euro payments and leaving them in hostile US/EU controlled banks. Make EU countries pay up front in metals or commodities before they will send them any more gas. If Germany has to pay gold for gas, Merkel will have to pressure to US to return their gold. If US does not have the Fed will end up having to buy gold. The Fed can create fiat money out of thin air. Merkel can not print gas or gold.

But that is short term. Germany could require payment of taxes in gold, especially import/export stuff. One domino after another and viola, gold standard. Would it not be more tempting to ask for payment in a gold backed currency?

Russia could sell rubles for gold to Germany. Then they sell them oil for rubles. Having to use rubles would be far more humiliating than gold.

Russia could sell rubles for gold to Germany. Then they sell them oil for rubles. Having to use rubles would be far more humiliating than gold.

Excellent anlysis. Russia doesn't have to back rouble by gold. They only have to price their exports in roubles and insist on payment in roubles for their exports. Central Bank of the Russian Federation can agree to buy gold from foreign central banks for roubles at the prevailing market rate for gold in roubles.

Global Observer Excellent anlysis. Russia doesn't have to back rouble by gold. They only have to price their exports in roubles and insist on payment in roubles for their exports. Central Bank of the Russian Federation can agree to buy gold from foreign central banks for roubles at the prevailing market rate for gold in roubles.

---

I will take this one further on your excellent comment. Don't you all realize that this is exactly what the US government has done and what all fiat currencies do? Thus, you have downward pressure on PMs and upward pressure on fiat. Everyone needs to raise (buy) fiat to settle debts and do financial transactions.

I think not only do people appear to lack an awareness regarding the risk of mutually assured economic destruction but but after the last several wars america has fought they feel war is "no big deal." The idea of America getting involved or jumping into a war in Ukraine would have been hard to imagine a few years ago. As I write this we are engaged in a war of words but the potential for this to escalate into a shooting war is real.

Allowing events to deteriorate into a major war or possibly into what some see as World War III is becoming a reality. As insane as it appears this could become the final outcome. The location of this as a military confrontation is right in Putin's backyard and this is a strong advantage for Russia. It is silly to think Putin and Russia will back down. This means poking the bear is not a smart move. It cannot be emphasized enough this government was not elected by the people and that the military of Ukraine is divided and extremely weak. More about this subject in the article below.

Putin is still holding his cards tight.The first of the big poker cards will come out in May during the meeting with China.The actions taken by the States & Europe have been poorly planned and hastily thought through.Don't underestimate the financial power of China in helping Russia out.This could really backfire against the U.S, but I think that China knows that it holds the balance of power because they want the EU to remain a big trading partner too.So,I think the Europeans are going to roll over.

Financial analysts have covered every aspect of the out of control bankster madness but none of them could see this interesting gold making technology breakthrough coming.

The gold manipulation cycle has almost run its course. Dr. Paul Craig Roberts is out now saying Fort Knox is empty, the naked shorts are now outed and it is getting harder to find an ounce of the real metal. Germany requested 1500 tons repatriated and received 5 tons.

I see gold reaching as high as $10 K an ounce and then moving downward from there in the longterm 15 - 20 year period.

The pace of technology today is breath-taking and after 200 Lab trails proving its new patent pending precious metals technology, a Canadian Research Company now has a new LENR method for making high yield gold from barren waste seed ores.

Yes indeed we make real gold and view the development as both scalable and highly commercial with an eventual price point near that of aluminum.

The company is in due diligence mode with TreveriMarket.com to do a US $5.0 million raise to construct a pilot plant. This will move the project from the Lab where large gold beads were produced to where we can start pouring gold bars.

The technology discovery story will break on Kitco.com. They are sitting on a major article waiting for the Treveri deal to put up the investor landing page.

Unless it can be made cheaper than mining, and physics shows it can't because of the energy required, it's a worthless technoloogy for those who need gold for anything but nuclear applications and that's very, very few humans, planet-wide.

What you're talking about is "nuclear fission" or "nuclear fusion" to create gold. Either you create gold by breaking apart larger atoms, or you fuse together smaller atoms. You really should look into what is involved in nuclear fission and nuclear fustion before you buy into some dorky claim that joe schmoe can do this in his garage.

While nuclear fusion works, they'd need to create an environment like that near the core of the sun. You really should look up what those temperatures and pressures are before you get too excited.

To create gold with nuclear fission, they'd need to create a nice big blob of some [unknown] super heavy atoms, and let the fission process break them apart... assuming they can find some element or combination of elements that break into gold, which is doubtful. The problem with this approach is... the super heavy atoms they'd need to start with probably cost about ten million times more than gold, if they even exist, so creating gold like that has a return on investment somewhere around 0.000001%.

So I'm not the only skeptic when it comes to 'predictions' about the gold 'priice' ?

Burn me once, shame on you - - - burn me twice . . . shame on me.

Burn me multiple times & I get to the point where I no longer listen much. Charts might get an occasional glance out of habit, but they are of little value when dealing with pure criminality. So ya just stack a little physical on a regular schedule as you can afford it.

Someday I may wake to a huge surprise on the gold price. Doesn't matter, its insurance. If/when that event happens & 'they' lose control, there's likely to be a lot of bad stuff going on that will need my immediate attention.